FTC Implements Rule to Eliminate Hidden Fees, Enhancing Transparency in Pricing
December 18, 2024
The Federal Trade Commission (FTC) has enacted a significant regulation designed to eradicate hidden fees in live event tickets, hotels, and vacation rentals. This new rule is part of a bipartisan effort aiming to improve price transparency for consumers across the United States.
With the regulation now in effect, mandatory fees such as service fees and resort fees must be included in the advertised price, allowing customers to understand the full cost before completing a purchase. This change seeks to remove the unexpected costs that often arise at the final stage of checkout, simplifying the purchasing process for consumers.
The FTC has finalized a rule to ban hidden fees.
The establishment of this rule is the result of a 2022 FTC initiative targeting deceptive charges that inflate consumer costs without delivering corresponding value. The FTC has been actively combating these so-called ‘junk fees’ for the past three years, successfully recovering hundreds of millions of dollars in refunds for consumers.
The implementation of this regulation is anticipated to save American consumers over $11 billion throughout the next ten years and reduce time spent managing these hidden fees by more than 53 million hours.
In President Joe Biden’s words, “We all know the experience of encountering a hidden fee at the very last stage of checkout — these junk fees sneak onto your bill and companies end up making you pay more because they can. Those fees add up, taking real money out of the pockets of Americans.”
FTC Chair Lina Khan also supported the measure, noting the significance of price transparency: “People deserve to know up front what they’re being asked to pay—without the endless worry that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” Khan stated.
As the FTC continues to advance consumer protection measures, this latest rule is expected to contribute to more extensive consumer rights safeguards in the future, potentially extending into other areas such as housing, reaffirming the agency’s dedication to ensuring fair practices and protecting consumer interests.
